SingularityU Chapters in South Africa launch The Future of Finance chapter event

“Globally, cashless mobile payments are expected to grow five-fold and reach $30 trillion by 2022, according to ARK Invest. This illustrates huge potential for businesses across the continent that are catering to largely unbanked consumers with high smartphone adoption,” said Mic Mann, co-organiser of SingularityU South Africa Summit 2018 and SingularityU Johannesburg chapter leader.

In a world where exponential technologies are becoming more ubiquitous, it’s crucial to understand how to incorporate them into our businesses to remain relevant and grow, as well as how they are also being used to solve some of the world’s grand challenges.

In the run up to the highly-anticipated SingularityU South Africa Summit 2018, the South African SingularityU chapter hosts a number of non-profit events aimed at strengthening the community. The first in the ‘Future of’ series of chapter events, which addressed the Future of Finance, took place in Johannesburg and Cape Town on the 16th and 17th of May, respectively. The focus was on the rise in cashless and frictionless payment systems, the blockchain and digital currencies, and the regulation thereof.

Speakers at the SingularityU Johannesburg Chapter event included, Antoinette Hoffman – Head of Digital Payment Wallets at Standard Bank Group (the headline sponsor for the SingularityU South Africa Summit); Arif Ismail – Head of Fintech at the South African Reserve Bank; and Nasreen Saunders – Consultant at the Blockchain Academy. The SingularityU Cape Town Chapter event speakers Arif Ismail and Nasreen Saunders were joined by Brad McGrath – co-founder of Zoona and Rupert Sully – Head of Sales and Business Development at SnapScan.

Cashless, frictionless and deviceless payments

While payment solutions have evolved over time, there are still some challenges that need to be addressed to make the world cashless. Antoinette Hoffman explained: “We have learned that it is not the technology that is the challenge, but rather the payment ritual. Cash is king – across the African continent, more so than in South Africa. The challenge is to get the customer to choose the cashless option at the point of sale, which is not always easy. The convenience of cash always being accessible and available with ATMs at every corner, gives that warm feeling of security that nothing can go wrong. Everyone accepts cash. There is no point of sale that will reject cash because of the perceived notion that fraud doesn’t happen with cash. You have the money in your hand.”

Exponential technologies are removing cash from the equation slowly but surely. More consumers and vendors are making and receiving payments using payment innovations that leverage smartphones, such as SnapScan, Zapper, Zoona and YoCo, among numerous others. They modify front-end processes to improve the customer and merchant experience, without disrupting the underlying payments infrastructure.

Integrated billing solutions allow customers and merchants to transact on integrated mobile shopping platforms with ease and security. Hoffman added that “The future of payments is about reducing the use of cash. Data-driven customer engagement platforms and customer behaviour change at the point of interaction – this will be key in driving the success of reducing cash in the future”. She highlighted the characteristics of successful cashless payment innovations as follows:

Interoperability – the solution needs to be developed in collaboration with what the customer wants, for example, one app that addresses all payment solutions.

Simplicity – the solution needs to be easy to use and navigate to drive extensive usage.

Value-added services – the solution must provide an incentive that will encourage usage, for example a lower cost-option for transactions.

Blockchain and cryptocurrency

Blockchain allows for more direct payment and bookkeeping solutions that eliminate the need for middle-man mediators. Nasreen Saunders explained how BitPesa, which was founded by Elizabeth Rossiello in Nairobi in 2013, is eliminating the high costs associated with cross-border payments across the continent. “Today BitPesa’s largest customer segment are remittance companies, who have reported that BitPesa halves their cost of doing business,” she said.

The BitPesa model complements the banking industry by addressing underserved clients, upselling to existing clients, and adding to intra-bank efficiency. There is a compliance check at every stage of each of their fund-flows, which allows the model to mitigate the risks normally associated with digital currency transactions.

Saunders noted the rise in blockchain applications beyond the financial space, including its use in the publication of medical and public records, to register land rights, execute legal contracts, for voting, and to certify supply chains, among others.

Through crowdfunding platform Usizo Project, Emaweni Primary school in Soweto had Bankymoon Bitcoin-funded, smart-energy meters installed. The meters allow anyone to make Bitcoin payments directly to the meter to fund the energy and water needs of the school. “This revolutionary approach to foreign-aid removes the need for donors to make contributions via an organisation, which adds costs, and it distributes funds transparently. Donors can now directly fund the causes they believe in and it decreases the probability of fraud, as well as squandered funds,” said Saunders.

Fintech solutions

Brothers Brett and Brad Magrath founded fintech platform Zoona to cater to Africa’s primarily cash-based economies, high unemployment rate and the limited access to formal financial services. “As a solution to overcome this, we developed a financial application that enables grass-root entrepreneurs to become agents, who not only provide key financial services to their communities, but also earn an income for themselves at the same time,” said Brad Magrath. “Creating value lies in solving the customers’ problems and companies that do this will win.”

Rupert Sally noted, “The change has been in the ways that we are addressing challenges differently and this is where innovative solutions come into play. At SnapScan we are experimenting with person-to-person transfers, which is fascinating in that it is about people paying one another, instead of a person paying a business. We are investigating whether payments can go into e-wallet or how one can transact. We are looking at how we can make this easy and convertible.”

Regulation in support of disruption and innovation

The rise in adoption of blockchain technology and cryptocurrencies are demanding new regulations as transactions become more agile, and their reporting more dynamic and automated.

“Regulators now need to balance their rules and principles to support, rather than hinder, innovation. Global collaboration and co-operation with standard-setting bodies will be key and regulators will shift to build staff capacity through deep knowledge on exponential technologies,” said Arif Ismail. “Highly effective regulators will work to create innovation facilitators such as hubs and sandboxes to keep close to emerging developments and foster shared learning.”

Ismail noted seven phenomena and their implications that financial regulators should consider when drawing up national and global regulations. These include: Artificial Intelligence and autonomous technologies; biotechnology and nanotechnology; cloud and Q-computing; distributed data, ledgers and big data; the current energy landscape; fintech; GAFA (an acronym for the world’s largest tech companies: Google, Apple, Facebook and Amazon) and e-platforms.

“Through continued conversations and sharing of information between different disciplines and industries, we open up the possibility for innovative solutions to answer the African continent’s challenges,” said Mann in closing.

About the SingularityU South Africa Summit

In its second year, the two-day SingularityU South Africa Summit – hosted in collaboration with Standard Bank, global partner Deloitte and strategic partners HP, Liberty, SAP and MTN – continues its quest to accelerate South Africa’s culture of innovation. The summit will bring together some of the world’s most forward-thinking individuals and the continent’s most curious minds to help #futureproofAfrica.

Delegates at the 2018 SingularityU South Africa Summit can expect compelling presentations and discussions on exponential technologies that can be used to create positive change and foster economic growth on the continent. Popular Singularity University speakers Ramez Naam and David Roberts are returning and will be joined on stage by:

Singularity University is a global community that uses exponential technologies to tackle the world’s biggest challenges. Our learning and innovation platform empowers individuals and organisations with the mindset, skillset and network to build break-through solutions that leverage emerging technologies like artificial intelligence, robotics, and digital biology. With our community of entrepreneurs, corporations, development organisations, governments, investors, and academic institutions, we have the necessary ingredients to create a more abundant future for all.